Part 2: Greed is toxic – patience pays off

21.09.2018

The second part of our current article series (here the first part) takes a close look at what can be done wrong when using location-based services in retail. Because technology is not a cure-all and not an aim in itself.

Jonas Hellweg writes in a guest article on the industry portal Locationinsider.de: “According to Davis “Technology Acceptance Models” (TAM), in order to gain acceptance for a technology, the ‘perceived usefulness’ and ‘ease of use’ of a technology should be given and visible to the user. However, the providers tried to reach as many customers as possible with location-based advertising (LBA) in order to increase the provider’s turnover. The customers were not aware of the ‘perceived usefulness’. For example, location-based advertising was sent to customers via push messages, which was perceived as an annoyance.” […] It is also necessary to critically question when the customer has a need for orientation. After all, the ‘perceptible benefit’ for indoor navigation is only visible to the customer if they have a need for it. In addition, the accuracy of location determination through beacon technology represents a challenge for user acceptance.

In plain language this means “too much advertising” and “too inaccurate positioning”. Things that an experienced provider can regulate and which are also in the hands of the operator. Because: In the case “too much” the offerer places its own need, fast and direct turnover increase, over the need of the customer. Greed instead of patience then results in low acceptance of the possibilities. The stationary retail sector is thus depriving itself of the opportunities offered by location-based services in an increasingly narrow market – after all, online trading is still threatening. And its numerous email newsletters are a) quickly unsubscribed or b) redirected to the spam folder. In the end, mobile and location-based marketing only works if the content is relevant. But then it works really well. Stefan Ki Bergler, Head of Business Development, Smart Positioning, at a manufacturer of lighting equipment and systems, is quoted in the industry magazine stores-shops.de: “We are talking here about an increase of more than ten percent of the average shopping basket value”. Bergler also points out that this has gone hand in hand with an increase in customer loyalty, a further finding that his company has gained as a technology partner for the Swiss fashion company Bollag-Guggenheim Fashion Group in Zurich. Bollag-Guggenheim has personally approached shoppers in the area surrounding the store or in the store via their smartphone and attracted them with special offers – from special, time-limited discount offers on certain assortments to invitations to the legendary free coffee in the store.

All these marketing measures are classics of proximity marketing which, when used correctly, have a tremendous effect – because they exactly meet the wishes of the consumer.